JEDDAH – Nowadays, amid fast-pace developments and cutthroat competitions, to stay on top needs precise decision making. In a recent interview, Jenny Davis Peccoud, Senior Director, Global Organization Practice, Bain & Company, emphasized to the Saudi Gazette the value of coming up with the right decision in measuring business performance. “In our experience working with different organizations over the past 25 years, we have learned that companies can only get better at decision making when they focus on it. Their business performance likewise improves. However, we also know that decision making remains a chronic problem at many companies. Needless to say, organizations that are unable to make firm decisions and deliver results often flounder and struggle." She said one common sign that the decision making process is failing is when decisions take longer than they should. This is often because the information needed for major decisions isn't available at the right time or in the right format causing decision makers to be swamped with more data than they can possibly decipher and use, or because decision roles and processes are unclear, resulting in unnecessary bickering and yield loss. But the issue can also be that decisions take too much effort because of unnecessary complexity and bureaucracy. There are also times when a company makes a good decision, but the problem is that the execution is poor or there is no action at all. She went on to say that improving decision making and execution is a continuing process. Companies can do it one step at a time and must make sure to follow through with each step. Peccoud enumerated some steps that may be considered in decision-making process, such as: – Assess the effectiveness of the decision. If the company continues to face nagging problems, or if you're not faring well against competitors, this can be an indication of decision-making problems. Identify critical decisions. Some decisions clearly stand out as important. They're the big, high-value, strategic choices made in every part of the organization. But many organizations overlook a second category that can be equally significant: operating decisions that seem small but that are made and remade frequently and generate a lot of value over time. – Redesign individual critical decisions for success. Once critical decisions are identified, an organization can then start working on improving the process of making those decisions by thinking through the ‘what-how-who and when' for each critical decision. – Ensure that your organization enables and reinforces great decision making and execution. This is essentially about making sure that the organizational structure does not undermine but rather complements individual decisions. – Embed the changes in the way your organization works every day. Make sure that the changes that have been made stick. Moreover, being able to identify and weigh the importance of which decision matters most, is also pivotal, she noted. There are certainly big and small decisions to be made by a company all the time. Managers and employees must therefore be able to distinguish which ones to focus on. “To be able to identify critical decisions, it is important to create ‘decision architecture', which is a list of decisions for every major business process. Once the list is complete, you can then further filter the list by understanding the value of each item on the overall performance of the company," Peccoud underscored. She added: “An important tip to remember in determining high-value decisions is to make sure you don't miss everyday decisions that add up over time – decision value multiplied by frequency is a handy formula to remember. In deciding the really important decision, you can also take into consideration the degree of management attention required. Some decisions need more management attention than others to work well. Each company will have different critical decisions, but it is often a good start to have a list of about 20-30 critical decisions." Finally, the senior executive of Bain recommended using a tool called a decision X-ray to determine why other decisions fail. This is done by asking everyone involved to rate decisions in terms of quality, speed, execution (yield), and the effort involved. Who plays what roles? Are the roles clear to all? How well does the process work? What behaviors get in the way? The process of identifying the critical decisions and then x-raying them will allow any organization to focus on what matters most and addressing the specific barriers that are holding back performance. – SG/QJM
